The Chancellor’s 2013 budget (Wednesday 20 March) will come and go and make absolutely no difference to the UK economy. It is time to think ‘outside the box’.
The concept was pioneered in the United States by the Walt Disney Company. Their executives used a nine-dot puzzle to encourage lateral and creative thinking.
Here are FIVE suggestions to help stimulate the UK economy:
1. Re-energise the Financial Services industry in two main ways –
a) Recognise that the 2012/2013 budget (£578.4m) is far too high, order immediate cuts and rebate £50m to the member firms. This will strengthen balance sheets, encourage employment and lift morale.
b) Tell the FSA (FCA) that “enough’s enough.” Liberalise the industry by a new approach to regulation allowing markets to control themselves (this was the system that allowed the AIM to become the most successful junior market in the world).
2. Create a new Enterprise Stock Market (based on the now defunct PLUS Markets) to provide a flow of early stage equity finance. It will be staffed by proven market professionals and underwritten by Government (by repayable loans) so answering the issues of risk and liquidity. It will require professional advisers whose fees will also have to be subsidised. The result will be a boost to SMEs, a strengthening of their balance sheets and a greater willingness of the banks to lend.
3. Increase the limit of the SEED/EIS scheme for early stage equity fund-raising to £500,000 and extend it for two years. Property assets (providing the business is not a property development business) should be included in the assets test so allowing retail businesses (which own their own premises) to benefit. To-date the SEED/EIS has failed to have any impact.
4. Scrap the Department for Business, Innovation & Skills and transfer all the resources to the Treasury. The BIS has been a complete disaster and has no effect whatsoever. The best financial brains lie within the Treasury and provide the shortest link to Government and the Regulatory authorities.
5. Increase the subsidy on first time mortgages to stimulate the housing market. The ‘funding for lending’ scheme is not the right way. Direct subsidy is the only way to boost this immediate route to community cash flow. A house sale equals another purchase equals estate agent’s and legal commissions, more business for local shops and is socially desirable.
Thinking outside the box seemed to helped Mickey Mouse: over to you, Chancellor.